Aggie is an Australian exchange student in China, and she currently has 14,000 yuan in her bank account. If the exchange rate changes from 1 Australian dollar = 6.21 Chinese yuan to 1 Australian dollar = 6.37 Chinese yuan, what happens to the value in Australian dollars of the money in Aggie's bank account?

A. It increases by $56.63.
B. It decreases by $56.63.
C. It increases by $2240.00.
D. It decreases by $2240.00.

Question

Aggie is an Australian exchange student in China, and she currently has 14,000 yuan in her bank account. If the exchange rate changes from 1 Australian dollar = 6.21 Chinese yuan to 1 Australian dollar = 6.37 Chinese yuan, what happens to the value in Australian dollars of the money in Aggie's bank account?

 		A.	It increases by $56.63.
 		B.	It decreases by $56.63.
 		C.	It increases by $2240.00.
 		D.	It decreases by $2240.00.

ranga · Answer

Before the change in exchange rate, Aggie has 14,000 / 6.21 Australian dollars in the bank account.

After the rate change, Aggie has 14,000 / 6.37 Australian dollars in the bank account.

It will be lesser because of dividing by a larger number.

Compute the two ratios and take the difference to see how much it decreased by.